on c-span. now we look at how the new congress and the trump administration could change current trade laws and pending agreements. we spoke to bloomberg news reporter on washington journal. this is just under one hour. "washington journal" continues. host: michelle jamrisko joins discussingcontinue trade policy in the incoming trump administration. i want to start by amending our viewers -- fight reminding viewers of the key players with trade issues, starting with president-elect trump's nominee for commerce secretary. guest: wilbur ross has been selected [indiscernible] the top trade guy in the administration, someone the transition team has said believed trade policy. commerce department, the u.s.

trade representative office within the commerce department, is typically given power but there has been some talk about that would be less emphasized, whereas wilbur ross will take the reins. host: what is his background? guest: he is a businessman. he has a lot of history with trade, so he really does know the manufacturing base well and people trust him to kind of make decisions that trump are in line with the campaign message -- that are in line with the trump campaign message. host: how did he come into the -- when did he join this team or become a supporter of donald trump? guest: he has been a member of the campaign for quite a while. he has been an economic advisor for some time and lead a lot of the economic analyses throughout howcampaign, as far as proposals would come about and how they would affect the economy, and really benefit the american jobs. that explain the job

wilbur ross is going to be doing in the top that peter navarro will be doing and what they will be in the trump administration. guest: there are a lot of questions because peter navarro's job is a new job in a new office, so president-elect trump has created a trade council within the white house, led by peter navarro. a little unclear on how much personnel be dedicated to that, task -- the been a council has been passed with the initiative of bringing back american manufacturing, renegotiating trade deals, and being an advisor to the president on how to do that. he will fill a different role than wilbur ross at commerce, which is more traditional as a cabinet position. host: did those tasks used to be under the commerce department? is this a transfer of power or responsibilities? guest: i would say some of the

things we talk about around the new trade council, yes, usually would fall under commerce and within commerce, but it remains to be seen how much this will be expanded. trade was a big message for the trump campaign, so to form a new whate is quite unclear that will mean logistically and practically, but symbolically, we know it means a lot in terms of showing that he wants to dedicate -- president-elect trump wants to dedicate more resources toward the issue. what let's talk about president-elect trump has promised with trade. he suggested pulling out of the world trade organization, designed to help dissolve trade disputes, talked about leaving nafta's mexico this and agree to negotiate the pact, not signing the transpacific partnership, the 12 nation deal, imposing imports,n chinese execute and imports, and perhaps other imports and declare china

currency manipulator if it does not change trade practices. a lot on his plate and what this he plan on making number one? what will happen in the first days? guest: he said he would like to scrap certain deals on day one. it is unclear if he will pull through with that. some advisors when they speak on his behalf, it has been different on how they approach things. steel by doingr and chief executive officer of nucor industry company. he would say a few months ago defensive terrorists, when he called them, would be the first step to put trading pressure on china and mexico. now we hear the top advisor talk about how president-elect wants to start with terrorists -- tarriffs.

it remains to be seen what order and how they will play out. we are in uncharted waters. host: we talked about nafta this morning. trump -- ken donald trump leave nafta and how would that work? guest: when we talk about things that have not been done before, this is the subject of many debates. we do know there is a general consensus the president has wide latitude to do that. the president has been given trade negotiation authority, so he has the ability to negotiate agreements and then have them send them to the house or senate for an up or down vote. thewhen he wants to leave agreements, people are in agreement that he could do that and not have any need for congressional approval terry -- approval. host: michelle jamrisko is our guest for the next 45 minutes. if you have questions, republicans, (202)-748-8001.

democrats, (202)-748-8000. independents (202)-748-8002. covers tradeisko policy. how long have you been covering this? within the u.s. economic portfolio and trade becomes a part of it, so a few years and under a range of issues. host: and covers them for bloomberg news. check out her work at bloomberg.com and at twitter. bobby instion from spanish fork, alabama, independent. good morning. good morning. great guest. i would like to call people's attention and hear your guests thoughts and opinions and insights on the following topic, which i think is one of the most positive things that donald trump has done so far, and that is to appoint dr. peter navarro, professor at harvard, phd, with traits with china.

when i lived in asia, it was a laughingstock among the asian people up how badly the united states has been beaten in a huge for the of trade deals last several decades. i have fred navarro's books. i encourage everyone to read them. the guy is phenomenal. with a balanced weight less professional economist, he goes case-by-case with listing the specifics on the real dangers to america's national security because of china getting the upper hand on this. i would love to hear her thoughts. guest: by conversations with peter navarro, you have reflected some of whatguest: hed about. he essentially made a career out of trying to show how china has eaten the lunch with u.s. and trade. he essentially, we should back up and talk about his background, phd economist at uc irvine, a rarity in trumps

circle, where there are a lot of assessment you're taking the reins. he comes from an academic background. his main gripes about china, he says he believes in the early 19th century free-trade idea for trade can be beneficial all, but right now, it is not working because china is seeding on four fronts, they have a exports, lacks environmental and worker standards, and they have that istual property deemed violation comes of his main message is that he wants to target these things and china is a big target. host: let's talk about reception he has received. here's a story from "the associated press" and "the l.a. times." the chinese newspaper criticizing peter navarro, calling the traded kaiser and "anti-china alarmist," and warned both sides would suffer

if commerce is disrupted. what about your washington, d.c.? guest: it is mixed. he is a little bit new and only came on the campaign several months ago and has a limited background of president-elect trump. navarro's he read worked many years ago and appreciated them but they didn't have much personal contact info this campaign. reaction is next. people who are against the message that the trump campaign manager promoting transition promoting, would say that maybe there are violations of international trade, but it isn't as much as navarro and his team are talking about. the other part being what he will do about it. protectionist measures are not popular among the washington crowd, so the idea that something the u.s. does will provoke retaliation certainly makes a lot of people here and in new york and economic circles

nervous. host: what is the last trade with the u.s. was in? guest: [laughter] tough question. a lot of people go back to reagan to talk about -- especially when i mentioned defensive tearriffs. they look back to reagan did to count to a japan was doing at the time, and this was something trunk in the 1980's, you can find old clips from oprah winfrey, where he talks about the potential for running for president and says, i just want to make things fair for american tokers and he just changed append to china and it is today's message all over again. iffs goingtarr on and eventually, thing settled. we will see what happens. host: there are talks about donald trump only nodded the world trade organization,

renegotiating nafta, some of the arriffs, are these things you have heard peter navarro say? have been, they pretty consistent on what can be done in the plan. it is unclear what the sequence of events is. he has also talked about rriffs on,lapping ta but they will talk about how they think others will react in the best negotiation. host: lee is on the line for republicans. good morning. caller: earlier this morning on tv news, they said that iran negotiated with boeing for $14 billion for planes. now, iran says they will only billion instead of $14 billion and i'm wondering whether this has come about because donald trump has told

boeing you are charging too much for future presidential planes and this has put going in a precarious position? guest: i have to apologize. i have not seen that news this morning. and i can say is that trump his statements about different companies, including boeing, have really been a source of intrigue, especially when he has made a lot of these statements via twitter and that full speech mode. it remains to be seen. that is one thing from the wall street side that companies are gauging how to react to certain statements he makes and whether it is reflection of the policy move or a one off criticism. happenhen the tweets from donald trump any cause out the southern company, are we seeing a market reaction that oft hours or days, or some the companies have had weeks of problems when they come out?

guest: it depends. i'd have to look at theguest: specific cases, and we did have boeing and others, but initially, it is a very short-term shock, but it is hard to rebound from some because you have someone with an enormous following, the president-elect, and enormous uncertainty under what he would do to follow up the statements. springs, in conway north carolina, democrat. good morning. caller: good morning. to change he is going out the trade deals, well, the republicans in congress were the ones that passed all the trade deals. how are they going to deal with that? guest: fair and interesting question. i think it will be very interesting to take a look at how congress feels about this. he has a tremendous amount of goodwill in his own party right now. he scored an election victory for the republicans in the house and senate, so some are coming into his administration with a

sense of cooperation. a lot of them do not share his view of you pending the international trade system, so we'll have to see who becomes the allies and it there are enough to win over on things that need congressional approval. host: i want to get your reading on this clip from earlier, congressman kevin brady, the chairman of the house clean committee, talking about donald trump's cloud to negotiate nafta. i went to know what you hear. [video clip] congressman brady: i have not spoke to him or his team about where enacted they would want to improve. he talks about these issues and really talks about not so much with drawing but going back and trying to make it a bigger win for the united states. we have a manufacturing surplus with nafta countries. these relationships helped us, worldwideove through

recessions better than other countries, as will perry look. i would encourage the president parts andlook at the after that looked right in the 1990's but can be modernized today. if you're going to renegotiate an agreement, make it more free trade, be bolder about reducing tariffs in all directions, give us more economic freedom to sell what we're making in america, by the products that consumers want to buy, so the approach is going istake in nafta or tpp's to go bolder, opened up more to the american business services, that would be welcome. host: that seems a far cry away from donald trump calling this the worst trade deal in history. guest: right. a few things that congressman

brady says that are interesting. one, he uses the word modernized, something that neto haspresident said, too. our neighbor to the norse, prime minister trudeau, said he wants to talk about renegotiating and says he could modernize. what he is saying is, let's look at blacks worker and environmental standards, the criticism navarro has a china, and let's modernize those standards in a way that twentysomething years later, we can keep up-to-date. about the opening up of the borders a little bit more and renegotiation. it seems counterintuitive to the message trump promotes, but it gets back to what people forget that even in free trade agreements, these agreements can be quite thick. some scholars joke that if it really is free trade, would it be one page? host: no tariffs>? no guest: tariffs, but

essentially come you have to have them in all of this. how do we change the tariffs in place and maybe institute more or less and get rid of some? we will see how that plays out and what specific industries will be targeted. host: on the caller's concern about the boeing deal -- here's the story of what was discussing. playingo sell 6.6 dollars with an aircraft to iran, may be worth only half of that, according to cnn. they put done on 45737 airplanes iran0 777s and the deputy transport administrators said the amount will be near $8 billion, so some news coming out today. and late yesterday. taken, ohio. what can. good morning. caller: good morning.

i have you on speakerphone. my left arm is not working right now. this is a quick question. 1996, i am a smoker, dumbass,now makes me a but i have been smoking for 40 years. i was buying cigarettes in america for $40 carton. when it the internet went worldwide and you could trade and everything, and i found a website where i could go call the company in ukraine and buy cigarettes from them for $12 made in the usa, and they would ship them to my ande, united states postal,

i was turning around and selling cigarettes to my coworkers and other people are $20 carton. i just want to know how is that possible that the product made in the united states can be packaged, shipped over the ocean 20%then sent back to me at to 25% of the cost was getting it here? host: michelle jamrisko, globalization one cigarette time. guest: [laughter] it can get complicated economic question but it gets at one thing that has come up in the nafta agreement discussions, which is companies are making decisions, not just around where cheap wages and labor are, but around where they can get the most bang for the buck, so to speak very to answer in a different way, they look at where can they employ people that will be most effective?

when you -- must reductive? when you adjust -- most productive? some areou adjust, more efficient for companies to send jobs there than the u.s. and china, so you see a lot of different decisions forming this calculus around where to put your resources and where to produce the products that end up eating cheaper sometimes. host: a tweet says we have been trade this discussion -- agreements can be good for certain americans but not necessarily american workers, like if it is not america first. and another on twitter asks, despite higher trade deficits, hasn't nafta resulted in more u.s. exports, therefore, or jobs? a lot of discussion on what nafta has and has not done and a lot of disagreement on the fact. guest: it can be a dangerous thing to wholesale blame or credits to nafta for certain

things, but i think we can point certain nonpartisan outlets like the congressional research service, and a lot of these independent looks at nafta in a different trade agreement was said that their modest effects but in the end, their modest positives with the u.s. economy, so not too much on the whole to benefit the u.s. economy but really what this agreement is about this year is how do compensate those who do inevitably lose from these trade deals? host: in new york, eric is a democrat, good morning. caller: thank you. engaging discussion. you are, i am pleased the guest. i hope by giving -- michelle, i am pleased you are at the guest. i hope a giving an example, if we could take the auto industry with cars and trucks, whether they be foreign cars made in mexico, japan, kia, toyota, volkswagen, and we change things

and do these new tariffs and they are in effect, who in the end will put the bill and be paid? is it the end consumer, the car manufacturer, the country, is this all shared? can you explain if this goes through by using all these many cars, foreign cars and trucks made abroad and then are sold in the united states, how would this all work in the end? is it the consumer, manufacture? can you give an example? host: michelle jamrisko, we'll let you get that. guest: those are all great questions and things being debated and passed by companies, scholars and politicians. to your point about how this affects the end consumer, a lot of people who are rebutting the

trump message say that you forget the people who have lost out and others who do not necessarily lose out from nafta or other trade deals and how they are enjoying cheaper prices, cheaper import prices from certain countries and different products, so in the end, that is the benefit to the consumer. however, it will depend on how these industries are targeted and as the caller mentioned, the different parts may be made in different places. if you take -- to use the example of the car, certain parts may be made in mexico, china, vietnam, and the whole supply chain concept that has gotten so complicated over the through globalization is hard to disentangle, so one company with many parts, yes, maybe if trade deals are renegotiated somewhat, that part needs to find the new home, maybe america, but the whole

product is affected in a different way then it used to be, or the product was maybe made in one place or smaller products in one place. host: in new jersey, curtis is an independent. good morning. caller: good morning. how are you guys? host: doing well. caller: doing well as well. a few things to read about nafta, donald trump and myself, really quick. do.a is a must now we are on to the asian theater, the asian treaty. donald suggest should these things the knowing, they have been in air force one for years, they know what they are doing. i am a defense contractor in the united states of america and ran for president in 2016 that was taken away illegally, sick and youe me up and elmer if want more information. i do really care too much on that, but nafta, we need mexico, the border between texas, and the one in canada, that keeps us secure.

donald speaks before he thinks. he is too loud and core religions and populations of people is ridiculous, and i thank you very much. i think your news station c-span is first-class, first-rate and thank you. host: curtis, question on nafta, if donald trump does renegotiate nafta, what role will congress play? did they have to approve and the negotiation? -- a renegotiation? guest: we haven't really done this before, but the consensus is he would be doing that with canada and mexico and would send the package to congress for an up or down votes in the house or senate, so it would have to go through as another trade deal, but it remains to be seen. he made try it another way and we would have to see how the reality plays out.

host: as we try to guess at what will happen, lots of concerns about the mexico portion of nafta. are there specific concerns u.s. canada and manufacturers moving to canada? guest: that has been lessguest: of the concern, especially concerned -- in comparison to mexico. you china's specific industries and with other manufacturing in mexico. mexico is concern for the impact on agriculture and different parts of the agriculture economy , so everybody has their pet industry, and mexico has not been that much in the conversation of the need to renegotiate as mexico has. att: you can follow us c-span wj.

joe is in miami, florida, republican. good morning. caller: good morning. i would like to talk about the oil trade from 2000-2008 crisis, to $1000 -- from $13 plus barrels of oil, was caused to an agreement of opec to reduce production so that the price of oil would go up. the effect was devastating in 2008, just because we slowed down. one of the things happening again here is that opec is agreeing to reduce production again, and has raised the price a little bit more. -- before we cannot compete because we had legislation that we cannot an international market and now we can. i don't see that move being taken advantage of and i believe god is regulations, so once regulations cannot, what will --

i believe god is regulations, so it's regulations, out, what will be competing? guest: there is a lot around the oil markets that is interesting and not so much a part of the trade disagreement we are talking about in discussion. what we have seen is that the u.s. -- officially u.s. shale producers have survived the downturn in prices worldwide. adding morem are breaks, coming back, getting production back in business, so that is part of this story. he also got up deregulation situation. we have seen since president-elect trump's victory, a lot of small businesses, and other businesses or sentiment surveys, expressing great optimism about easing the regulatory board in on tax reform, so it remains to be seen if those policy initiatives are

pushed through, we could see higher sentiment leading into action by companies that we have not seen, which is lackluster business investment over the years. host: colleen in florida, democrat. good morning. caller: good morning. just for your information, the thing about the cigarettes, that was a tax paying, not a trade -- game,ing, not the trade and the taxes were still due to the state the person lived in. as far as trade goes, we have we are pickinge winners and losers. 5, allhey had the g8, g those conferences around the world, there were protests, all highly secret negotiations. the tpp -- are congress had to go to a room where they cannot take a pencil and paper to read them. they have shipped away at our civil rights, which is more important than our financial

rights. when you talk about these economic things going on between countries, people are making a fortune. i mean, the money is the whole problem with it. when we gave up tariffs, we cannot level the this whyield, and that we closed our steel industry and why we have had the financial situation that we have had, and the investment opportunities that send our stock market crazy, again, that is our regulations were gone, and it harmed the population, the working population of the country. did notalization protect anybody, it did not protect china. all the people in china now have all the environments of problems you cannot have before. host: michelle jamrisko? that areo points

interesting, one, thank you for pointing out the tax issue, a very salient point and something we will see play out and put donald trump would really like to institute wholesale tax reforms and there is an appetite in congress are that carried you may see that play out in the trade conversation, with the big effect on the end product price trade she talked about globalization. i thought it was interesting how she put it because it is important to remember how this happened in the campaign and how it affected the final vote. a lot of people forget maybe did not know that hillary clinton, among voters who said the economy was the top priority, she won. it is not totally story of people saying that my economic circumstances are terrible, i will vote for trump. it is much more complex. something that trump pushed on three different friends at the same time with an economic agenda surrounding trade, security, immigration. he talked about all these three

things together and appeal to people who had a fear, not only of losing their jobs or having higher wages, but of immigration kind of having an effect negatively and security. he played on all of these and talked about how closing the borders are cutting off open borders with help. host: before we leave colleen's call, she talked about the negotiating process for trade deals and what congress could and could not do when it came to dealing the trade associations. in the first segment of our program wanted to know more about the fast tracking, fast-track process and why congress would want to take themselves out of that process. can you explain? guest: it is one of those things are you look and say, congress wants to proceed in power in a way -- [laughter] ofwas recognition that some the politics and processes have gotten out of hand, so before tpa and fast-track authority,

congress, any congress member could amend or filibuster in the senate a certain process and effectively killed the trade deal. there is such -- at least in congress, there is much more of a broad bipartisan. resolve the nafta vote earlier on hopper down two decades ago, but there is still popular sentiment on how free trade is good, so they wanted -- on both sides, they wanted to help move the process along and about the chance that it would not be tripped up by any one person's amendment or filibuster and allow the authority to give an up and down clean vote trade agreement. host: greg in virginia, independent. the morning. caller: good morning. when i was in high school, we learned about mercantilism and the key was to have a favorable balance of trade, and it seemed like her problem is we have not had their trade policies over

the last 20 or 30 years, especially with countries like china, japan, and i like to know how donald trump will handle that, especially with china. policies need to be fair, we need to be able to export and import from them. you see going to be able to get those things done without having an all-out trade war with asia?ast guest: i think the two friends that president-elect will have to look at, a number of callers mentioned that free trade is not necessarily fair trade, and that is a big point in the discussion. i think president-elect trump has to look to mystically, inward at what we do to compensate workers who inevitably lose out in trade deals. the caller mentioned haskell trade, and i am thinking back to my own high school professor thatng about how they used

advantaged and produced a trade system in which everybody wins. if you have traditional affects taken care of, being the workers who lose their jobs or whose wages are driven down because the company is putting resources elsewhere, then there was all of that to consider on the domestic side, how do you compensate workers or find something different and how do guest: hud to his band -- how to expand apprenticeship programs. how do you negotiate with these countries is the question of the day. where can you find common ground and offset so everyone is happy in the end? host: after signed into law over 20 years ago, do we still pay money for trade adjustment assistance over nafta? guest: the program is still in existence. there is a number -- it does seem outdated to a lot of people. they see the effects of taa have not exactly been what we have

wanted so what the u.s. workers and -- have wanted. that is another thing they look at in terms of how to institute some real hard negotiating lines that ensure we will be doing something for certain workers that are left out in the cold. how much money was congress being asked to set aside for trade adjustment systems? guest: it is hard to put a specific amount on it. it was not enough for some people. bernie sanders and hillary clinton were towing the line on how there was not enough trade production for workers and that was the reason all three decided they were not for it. in hampton,y virginia. we have 20 minutes left. dorothy, good morning. caller: michelle, i would like for you to clarify for me and the american public what to

two presidents that negotiated nafta. who signed it? was it bill clinton or george bush before he left office in december? around,was rallying waving flags, and talking about how great the nafta was going to be for the american people. was that not newt gingrich? will you not ask plane that to the american people? guest: she makes a fair this was point. all started under president reagan, at least initially drafted, carried through under the george h.w. bush administration and ratified under the clinton administration, so you do see a bipartisan picture. of course, at the time, as we showed earlier, the vote on nafta in the previous hour was bipartisan, so to think of that era, it is almost like a different time, where

globalization as we know it was just kind of catching on and a lot of people were enthusiastic about the promises of free trade. host: i should clarify on that vote total we showed, it passed 234-200 would support of 102 democrats and 132 republicans or 156 democrats who voted against it and 43 republicans. that was the implementation act that was passed on november 17, 1993. stead, new all hampshire, independent. good morning. caller: good morning. i wanted to mention, i think it was the 1960's, we used to have rca making tv's and radios and then the japanese dumped their product on us, and it seemed the government was reactive and never proactive and looks at we -- looks like we go through it all the time. how come and why don't they learn from that from the japanese dumping their products?

thank you. guest: interesting question and certainly one a lot of people ask this year around trade. one thing he gets at, is what can be done, and why hasn't the government done more? this goes back to the question of structure and when we ask what the president can do without congressional approval when we look at tariffs, the , president generally has the ability and the executive branch generally has the ability to institute very narrow tariffs and very short-term tariffs, but not long-term sweeping tariffs without congressional approval, so that is the best way to sum it up, but they today, he mentioned the japanese dumping with a negative effect. day-to-day, the

commerce department can [indiscernible] especially in response to certain company complaints, but that is much more. host: smaller in scope and more narrowly focused. when we talk about presidential powers on trade, we will talk about that in our next hour and our next hour, the senior fellow at the pearson institute for international economics and dean baker will be with us, cofounder of the center for economic and policy research, so that is coming up in 15 minutes. if you have questions for michelle jamrisko of bloomberg news, republicans, (202)-748-8001. democrats, (202)-748-8000. independents, (202)-748-8002. she will be with us for another 15 minutes, so get your calls in now. gary, chester, west virginia. go ahead. caller: yes, i signed up when i became a republican, but i always try to vote american, not party. that is something that people in government forget. they are american first and democrat or republican second. one, no business should be done

in congress unless 95% are in the room, congressional meeting room. i see too many times that there is one, two, or three people, and they are presenting bills or whatever to the congress and there's nobody there to listen to them. that is wrong. they should only represent anything to congress when the entire congress is in the room. host: would you be ok there are other members of congress watching from their offices on c-span? caller: no, they belong in that room. they belong in the congressional meeting room. host: you think that will keep congress from getting much work done, if any 5% of the members have to be there for work to get -- 95% of the members have to be there for work to get done? caller: we have got so many laws on the book right now, they are just wasting time thinking of other ways to do it host:. . host: go ahead, another point? caller: yes, no foreigner, ownership of of anything,

besides embassies, like one on the west coast and one office on the east coast, and i voted for obama when he first ran for office. i have no qualms about that, although i am a republican, i thought it would be good to have him in there, but i did not vote for him the second time. within two years, and in his first term, i knew he was the wrong thing for this country. i do not the democrat or republican. i vote american, and that is what people in the united states forget. american first, party second or last. host: all right, gary in chester, west virginia, bringing up president obama. what is his legacy going to be beyond trade? guest: it is uncertain at this it is a little incomplete. point. i think his administration with his commerce chief, they try to

put certain things in place to kind of move u.s. manufacturing to another level, as they called it they talked about advanced , manufacturing jobs, so if you look at the evolution of economy, you start out as an agricultural economy, and then into services, as the most advanced economy in the world, we are primarily services, so a lot of the rebuttal around the negotiating trade agreements and bringing manufacturing jobs back is people saying they really don't want all the manufacturing jobs back. what we do best is advanced manufacturing and services. so, you know, president obama's administration tried to move beyond the conversation of bringing back the hard manufacturing jobs and saying, those might be best done by others and maybe we can benefit

, but would be cheaper and labor can be more efficient if we focus labor on something else host: -- something else. host: allen in missouri. caller: good morning. i have a comment and then i grew up in the and i remember 1970's, the hubbub about buy american, buy american, and return that around. now, my question is, how do these companies get away with not putting "made in america" on the products? instead, they are putting "distributed," and it is always "distributed in the united states," but that doesn't mean it is made in the united states. so i kind of wanted to know how , they get around that. guest: the buy american provisions that were instituted several years ago and have come up again in this trade discussion do not restrict --

obviously, not every product has to be made in america, and the buy america scope has been on large procurement projects, and different areas of government procurement which i'm glad this , caller and gary brought up earlier because it has been an interesting point that some have made in terms of how do you balance what you want from say mexico and canada out of renegotiation versus what you will offer? some have suggested -- and i don't think it is a tack president-elect trump will take anytime soon -- but given the amount of infrastructure he wants to get done and given the support for the program, a be -- maybe loosen up the buy american restrictions and have point entities compete for those projects, which you will need a lot of resources to do, trump has typically said we have had enough unemployed people and we could fill those jobs at -- just with americans, but it remains to be seen.

there is a lot of research that needs to be done for the type of scale of infrastructure projects that he is talking about. host: not the first caller to bring up product labeling. has donald trump said anything about product labeling? guest: it would be dangerous to say no, but i'm hard-pressed to think of a specific time. host: let us go to bruce in new jersey, democrat. good morning. caller: good morning. thank you for my time. i wanted to go over everybody yelling about trade deals, but actually, it is about the patent office in washington. why wouldn't we have a law that states all products be in the patent office are not made in the united states? let's think about this. why wouldn't they want that? rules.apitalism capitalists want the cheapest product anywhere they can have it made so i wanted to address thee patent office and all patents made in the united

states are intellectual property being taken to other places. we should stop it right there. host: your thoughts on that proposal? guest: i have not heard the patent office come up too much. there has been backlog for several years, but it has kind of eased more recently. i don't know. again, one of the four chief concerns that peter navarro has, specifically about china, is intellectual property theft. we are seeing a lot of issues on how do you protect the intellectual property around producing any number of products that might be going throughout supply chains in different countries? host: you mention peter navarro. have you met him personally? guest: not in person but the phone, so hopefully sometime soon. host: tell us about his time as a professor. guest: he can be kind of feisty. i mean, obviously he has a bone , to pick on this, and he understands people disagree with them. i mean, he is out in california,

which is kind of funny. you talk about a left-leaning at mr. out there in academia, and he is waging this fight that sounds very not in mine with what the typical liberal right , and certainly university professors. so he talks with a bit of a chip , on his shoulder about how he is getting a lot of criticism from others in his field, but he theory just like the best of them and teaches that to his students and is trying to promote this message that ricardian theory should work but the caveats are so strong right now that the international trade system is broken. he is passionate about what he believes here, but is very focused on china. host: what about the national trade council? will that be housed in the white house complex or how much access , does he have? he will be listed as a

special assistant to the president. it is one of those posts that ary by administration. we have people under obama and previous presidents that had titles that were fairly new or used differently than they usually with her been in the -- usually would have been in the past. it is unclear. we do know that trump thinks navarro's strategy and message very fondly and thinks it is a very important piece of his economic agenda. host: a suggestion from dd fredericks on twitter, make america great again should be transferred to made in america, again. harry, good morning. caller: good morning. how you all doing? the reason i call, i am from an area in garrett county, where years ago, we had a plant that employed over 1000 people, and know, maryland is not the most employer-friendly state, and a number of other

things, those jobs pretty much got shipped to ireland and mexico and took a big hunk out of our middle class. at the same time, if you look into allegheny county down the potomac river, most of your industries that use to be there are not there. there is a paper mill that has been there since 1888, employed about 2500 people years ago and now is down to 600 to 700 people. they are struggling. the biggest problem may have between the epa and other agencies that harass them all the time, you also have this -- china operates these paper mills, and because they are government operated, they don't have to compete. they pick certain industries and they try to drive them out of business. there has got to be something there because these people that they employed, not all are college educated, but they were good people and they needed these jobs.

in the same area, you got obama's war on the coal industry, i mean, pretty soon, there will not be jobs. except maybe would you like more fries, sir? host: we will be talking about energy and environmental policy tomorrow. we are going to be taking up that topic for our three-hour program tomorrow. but michelle jamrisko, i'll give you a chance to respond to harry. guest: three different challenges are connected to that. one is tax reform, which we mentioned sporadically, but a company's decision to relocate. sometimes it is important to not quickly target a trade deal as a trade deal as the reason for companies moving jobs or moving resources. often, it is the cheaper tax rates abroad, which is another thing that trump has talked about as well. he also mentioned china having an easier time of taking control of certain industries, picking winners and losers, and that is

something that is distinctly un-american. as hard as it is to watch what they do, you know americans are , reminded that we have a very different system and we don't pick winners and losers typically. we let the free market decide, so there is a debate. we have not spoken a lot about this today, but automation, a lot of the plants he is talking about, it was not just taxes or trade deals that sent the jobs away. it was automation, or some form of it that companies are finding ways to become economically efficient, and sometimes, that means no humans, so we will see how that plays out. host: it seems excessively risky to allow the u.s. to lose vital manufacturing capability, especially to a potential adversary like china. wayne is in pennsylvania.

a democrat. good morning. caller: good morning. thank you for being on the air. i wanted to mention, i feel we avoid seeing what is going on in other countries. just for example, germany, everyone has a four-week vacation. ok, but the two main questions i is, a fellow wrote a book a few years ago, but he basically all the modern things we do with industry, we are going to have less people being able to work. but we have to get down to 20 hours a week roughly, i don't remember exactly, but people should make the same income with lower hours required. and then the other thing that , bothers me, i feel a lot of people in the united states are not being treated adequately in poor situations, but you look at other countries and there are other people way, way worse. can our society and economy get

better in terms of campaign during -- comparing with the whole world? do people deserve to be making more, and eventually, or that make society go downhill? i have been in germany and have seen a lot of good things, but they are probably like everything else. i would like to hear your answer. guest: the second point is interesting and important one in terms of what do we actually want. when people talk about wages and jobs going overseas, it is shortsighted because they don't think into context the whole quality of life metrics that may be playing out in that country that received those jobs. yes, they may have jobs but they might be much cheaper, and maybe not good for those people of there, butpeople also, there are jobs for those

people that may not have jobs otherwise. mentioning productivity, productivity in the u.s. is in a potential [indiscernible] something alan greenspan is obsessed with, and a lot of economists are figuring out why we cannot get that going. we will save that for another day. [laughter] about onenly have minute left. let us talk to david in clinton township in michigan. independent. david, can you make it quick? caller: i heard you say that a service economy is the most advanced economy. who determined a service economy is the most advanced economy? why would an economy that includes service and industry and stuff like that? are these the same thing that the old economics no longer works? we have been folded bill of goods by somebody and i want to know who is selling us this bill of goods. host: that is a fair -- guest: that is a fair question. this is a sure way of talking

about the evolution of an economy. the typically graduate to manufacturing services. all percent of gdp is manufacturing. i enough to say this is not just the services economy. you do want a mix in general, and we have one between agriculture. of, --ichelle risk michelle jamrisko. >> more on how it could change trade laws. of the peterson institute for international studies were our guests on washington journal. this is just under one hour. and we wrap up our program on the washington journal with a roundtable discussion on trade policy and we are joined by dean baker, cofounder of the senate for policy research, and a man for the economics.

mr. have power, we have been talking a lot about after this morning. donald trump has vowed to renegotiate nafta, ripped it up if you cannot get a better deal. as somebody who is an authority on presidential trade power, can he do that? >> yes, he can. which is a article determination article. and it is a matter of giving six months notice to the other mexico, andada, and withdrawing, so he has that power. there is some legal scholars who have argued that since the nafta agreement itself is not u.s. law, it is the nafta implementing act, passed by congress, which is u.s. law, and because of that, the president should, or must, consult with congress. i disagree with that legal interpretation and i think he can do it by himself. if he did terminate nafta, then the question is, what happens to

u.s. trade resurgence with canada and mexico? should he do it, in your opinion? >> i think that is a terrible idea. i don't think he will do it, but he will use it as a threat to gain concessions from actually three parties. wo, canada, and three, other companies. you had better open a plant in the united states, you better keep the jobs in the united states or i will do something which will make your life more difficult, by way of trade with mexico or canada. host: mr. baker, should donald trump renegotiate or rip it up? >> i would be more agnostic on it.

that woulddea what look like so there are aspects that would be great to change, so we have the investor state dispute settlement mechanisms under which the united states is being sued for canceling the keystone pipeline. this is something clearly done for environmental reasons. i never heard anybody say it is a canadian company. on that.w being sued that is absolutely absurd and that is because of nafta. getting rid of the special treatment that investors get in that would be a good thing. it would have been great when they negotiated nafta, there were agreements that are largely toothless. we have the european union with standards, you have to guarantee yeareeks are year -- a vacation. so if actual labor rights unions, if unions were victimized, they can organize in mexico or canada, they were actions you could take within nafta. the things like that i think would be great additions. that is not donald trump's

agenda. >> what you think his agenda is. ? >> to be honest, i don't know. carrier.was watching we all saw that. good to see a president go to bat for u.s. workers. on the other hand, the idea we are going to do trade policy case-by-case and the president threatens the company, that is not a good way to do it. host: how radical of a shift between one administration, outgoing administration, and incoming administration is this when we come to trade policy between the obama administration and the incoming trump administration? is there anything you can compare it to them past transitions? mr. baker: we have not seen anything like this in our lifetime. maybe there are elderly viewers here who remember the great depression, and you would have to be willing to your 90's, i suppose, to do that, but herbert hoover was a real protectionist,

and he signed, willingly, -- ariffs.ght our t roosevelt did not immediately reverse but he persuaded congress and we were in the great depression, to pass the ,eciprocal trade agreements act which led to negotiations one by one with countries. that is the biggest reversal in what i would call somewhat modern times. otherwise, you have to go to the 19th century or the very early 20th century if i can throw in a little more history. woodrow wilson was a free trader and one of, and his republican predecessor's were protectionists and so he helped reverse the law at that time. we're going more in the century back with the underwood tariff. mr. hufbauer: i think the

difference on the, not particularly defend the tariff, there has been research on that, the economic historian at university of california berkeley have done research and i think everyone agrees it was bad policy, but the idea that was major contributor of the great depression is questionable. didn't help, but i don't think we could tell the story had we not had that, the depression would be over in two or three years, i don't think that makes sense. host: i want to invite callers into this discussion. republicans, 202-748-8001. democrats, 202-748-8000. independents, 202-748-8002. dean baker is with the center for economic and policy research for viewers that aren't familiar, what is that? mr. baker: an independent think tank, been around since 1989, last of the internet start-ups . we like to think. host: and mr. hufbauer, the peterson institute? mr. hufbauer: yes, founded in 1980. it is, you know, going on more than 30 years now and it is a

center of the road, but on the free market side of the agenda. host: these two gentleman will be with us for the next 45 minutes to end the program this morning on the "washington journal." first, glen is in pennsylvania, an independent, go ahead, we're talking about the future of trade policy. what is your question? caller: my question to the two gentleman is that when president clinton was in the white house, he bailed out the chinese economy. that was $8 billion. he bailed out the mexican economy. he bailed out singapore, and bailed out japan and canada. now, did any of these countries pay back the money yet? i don't know if american people know this about what president clinton did. these two gentleman might know, because they seem like knowledgeable gentlemen. please tell the american people clinton bailed out the japanese

economy, bailed out the chinese economy, $8 billion, bailed out mexico's economy, singapore. host: got your point, glen. guest: one country, mexico, we made loans to them, after nafta came into effect. i don't think it was because of nafta. we made loans which were paid back. the big story, not sure if this is exactly what the caller is referring to. in 1997, we had the east asian financial crisis. we did through the international fund bail out those countries. that was a big mistake. not because we helped the countries, the opposite. the bailout was onerous. there was a qualitative shift in their trade policy. prior to 1997, if you look at countries like south korea, indonesia, malaysia, they had big trade deficits. on that, they were importing more than exporting from the u.s., europe, other rich countries. that switched following 1997, i think it was a big problem, when the trade deficit began to

explode. i think that was a very poor decision, the nature of the bailout. it wasn't we gave anything to these countries. it was quite the opposite. to my view the correct policy , would have been we have written down large amounts of debt so that you could have a normal pattern, developing countries are borrowing from rich countries, rather than the reverse. hofbauer why did trade , deficits matter and is there such thing as a good trade deficit? mr. hufbauer: yes. and i'm going to give you the two-handed economist. some trade deficits reflect just consumption binges. so it is kind of like a household, which spends far more than it earns and finally goes into bankruptcy. that is one extreme. the other extreme is a trade deficit which reflects investment. boom. well, if it is a true investment boom and money is put to , productive use, for example, in this country, railways in the 19th century, but other more

recent examples, what is wrong with that? the investment will pay off later and you can pay off the interest, as well as principle on the debt. now there is a third deficit, , which is not in the two categories, and that is the u.s. case today. we are the research currency of the world. that is the dollar is the , reserve currency of the world. companies want dollars, for the reasons dean said after the asian financial crisis, they got a hard shellacking from the international monetary fund and countries wanted their own reserves in large amounts, in order to solv self-insure againe next crisis. where did they get the reserve? they acquired dollars. how did they get the reserve? by exporting more than they imported. and that is a peculiar situation

with the u.s.. as reserve currency, we tend to have a system trade deficit which this year will be about $500 billion. host: mr. baker, some viewers today brought about currency manipulation. can you explain what that is and why donald trump has been so focused on it? actually: yeah, i prefer currency management. manipulation implys they are -- implies they are doing something in the dark. they are the most visible, the biggest country and the largest trade deficit. the idea, they target the value of the currency against the dollar. i'm saying management, it is not a secret, not like we have to catch them. are you targeting the value of currency? the idea is they are trying to keep their currency below the market value and the complaint is that as a result of having a lower value currency our exports , to them are more expensive. they need more dollars. so if you are live nothing -- live in china thinking to you , want to buy some part in

america, the currency is more valued more expensive for them. , flip side for us, the currency has low value, import is cheaper for the united states. that would be the argument as to why we don't like it, contribute to large trade deficit. host: does donald trump right to be concerned about this? i know paul: krugman, who i have a lot of respect for, i think he is mistaken on this. the reason i would say that is that you can look at the flows and currently, they are selling reserves, which means they are trying to heat the currency up, but they are sitting on over $3 trillion in reserves and $1.5 trillion in sovereign wealth fund. au would expect nearly half trillion, one trillion dollars. that keeps the value of your currency down, and the analogy allied to make is the federal reserve board. they just raised interest rates earlier in the month, so that means they want to see higher interest rates. i don't know any economist and you country who would say the net effect of the fed's actions

today is not to hold interest rates down, the reason is the fed holds somewhere around $3.5 trillion of assets. if you snap your fingers, and said no to the feds, the assets go on the market and that will drive interest rates up. same story with china. trump has said he a going to declare china currency manipulator on day one. i think, in fact, we will wait nuchin to be confirmed and he will do it. it will happen very quickly. manipulatorrrency does not carry any immediate penalty. it is not like we put up phrasing like that if he does that. but it is a slap in the face to china. they regard this as quite an

affront, and they will be unhappy, i think he will then use it as a bargaining chip. i want to emphasize what dean said that go further. i do not think you can call china a currency manipulator now on any objective test. yes, they did it in the past. they are not doing it now. they might do it in the future, but let us wait until the future when they do it. the only country which might currencyly call i manipulator now is possibly korea. currency manipulation at the moment is not a big deal, except lyrically. in glendale,is missouri. a democrat. good morning. morning, gentlemen. if i understand ricardo's basic nations it is that should produce goods and

services in which they have a comparative advantage. i would like to know what industries or services or sectors the united states has a comparative advantage in now. it seems like it is all financial services now and how do we keep all these folks that can't compete in those sectors, employed? there was a book titled some years ago, "average is over," and well, it is not over. there are a lot of average people out there. where do they work? host: i'll let you start. mr. baker: couple things, people say, high-tech sectors, you find in a lot of high-tech, we're losing market share to china and other countries. there are veryt smart people in china and india. you go to silicon valley, a lot of smart people are born in china and india. it is not clear where comparative advantage will be. you know, one point about the ricardo, you are referring to

ricardian trade theory, one key point, it assumes a fully employed economy. economists felt comfortable with that assumption. i always was skeptical of that story. i think in the wake of the great recession, i think, clearly, we talked with many economists, many of the most dominant economists in the world. we talked about the idea of secular stagnation. we have a long period where the economy operates below full employment. in that context, a trade deficit is a really big problem because that is contributing to lack of demand below full employment. i'm very concerned about trade deficits, in terms of comparative advantage, i can give you a longer story about our patent policy, and other issues maybe we'll get to that, , but it is not clear, i don't feel comfortable saying here is a comparative advantage. host: do you want to jump in? mr. hufbauer: i think we have a comparative advantage in a lot of industries. medical equipment, high-tech

materials, ceramics and so forth. obviously boeing, obviously caterpillar. and the services were mentioned. it is true, we have a strong comparative advantage in financial services. we also have a huge comparative advantage in entertainment, huge comparative advantage in education. how does that show up? a lot of foreigners come to american universities, paying money, full tuition to do it. so we are strong in a great many industries. that isn't to say i'm not concerned about the trade deficit, i don't want the message to go out, at least not from my mouth that the u.s. is a , nation of weaklings. it is not. host: schoolcraft, michigan, charles is waiting. independent, go ahead, charles. caller: three things real quick. number one, corporations with money outside of the country, once it is brought back, are

they going to buy stop with it pay more dividends with it, are , they going to buy other companies with it? as far as nafta, after mexico was capitalized, why didn't they keep going further south? these companies and corporations, why didn't they go farther south instead of turning to china? and the third thing is, china, they left because of the labor, now china has several millionaires now probably as , many as the united states now. and so, that obviously that means of their labor has increased as far as pay. why aren't american companies deciding to say, ok, we're going to make america again and start shipping over there. because china is going to be able to afford these kind of products. host: charles, before the panel answers, would you prefer these to continue to look to mexico for the placement of

these companies? caller: what i'm trying to say is that after they developed into mexico why didn't country go further south, where there was ample labor down there, like mr. baker was saying in these other countries down south? host: mr. baker start. mr. baker: i think the story there, one was that the labor in china, go back to 2000, after china got into the 2001, i should say, world trade organization, labor in china was probably just about as cheap as anywhere in the world. that was one factor. china had a well developed infrastructure, you were set up to companies could move there and count on not having factories confiscated, stable work environment, some things we may not like. they didn't have union or free trade unions. so, you know china offered them , very stable low-cost place to operate. one point i should make on china, and this to my view is a really good start impressive , start, china made incredible progress in raising living

standards of its typical workers. world bank did a report three or four years ago now that showed real wages in china tripled from 2000 to 2012, and there is a lot of measurement issues here, say they are off by 20% or 30%, that is an enormous increase in living standard in a short period of time. for that, i think that is a great story. mr. hufbauer: let me try to start with the corporations with money abroad. the viewer is right, there is about $2.5 billion held by u.s. corporations abroad. the problem i think comes to tax laws, and here is an area where i happen to be in agreement with the general thrust of what trump is saying. we have a system whereby firms bring their money back, get hit with an extra tax, why bring it back? secondly, we have the highest tax rate for corporations in the advanced world, practically in the entire world, so why invest?

i think here, if we here are two -- if we cure these two ills in the system, we might get companies coming back and u.s. investment is very low. we are under 15% of our gross domestic product in investment, research and development and hard capital plant and equipment. so there is a lot that can be done and this could be one of trump's big success areas. let me briefly comment on why not go further south. every company faces this issue when it looks to relocating anyplace. what is the productivity of workers and how can we improve that and what is cost of workers? well, if you go further south, oftentimes, you find absence of infrastructure, which dean just mentioned, it doesn't compare with china at all. you have work habits which may not be the same as china, very dedicated work force. you have corruption, which is

highly irregular, you have china which tends to be one stop shop , whereas corruption in many latin american countries, you don't know what you will end up paying. so these have all been weaknesses of the further south countries that you mention. and i think that explains as well as what dean said why china has been a favorite destination. host: go ahead. mr. baker: the tax story, we largely agree on this. i qualify a little bit, i'm less concerned about the tax rate. almost no one pays it. if you look at our average corporate taxes in the u.s. compared to other wealthy countries, rants, germany we are , in the middle of the pack or below the middle. , it is a good idea. everything will be in details. one aspect of tax reform, there is an enormous amount of money spent gaining the system. that is incredible waste. a lot of people are devoting themselves to figuring out how

to make it so general electric doesn't pay taxes, that is incredible waste and major source of inequality. the private equity industry is to a large extent are tax , avoidance industry. you have a lot of rich people in the country are private equity partners. fine if you can make that by being innovative and turning around companies. i don't want people to get rich by being clever and avoiding taxes. host: one thing the caller brings up and i want to circle back to is nafta. if donald trump goes through with his plans to renegotiate or to tear up nafta, can mexico and canada sue, and if so, what court does that happen in? what is the recourse for those country? mr. baker: if he follows the provisions within the agreement six month's notice, they have no , recourse within nafta. he has talked about punitive tariffs, 35%, that will be wto violation. so, even if we pull out of nafta, we're still in the wto, and if he were to violate wto rules, they account go to the wto appellate process and would

-- and we, presumably, would lose. if he says i don't like companies going to mexico. that is part of nafta. if nafta goes away, that goes with it. host: back to calls. tom in washington, d.c., democrat. good morning. caller: yes, good morning. i love your show. i first would like to start off by saying i drove by the old post office, the new hotel, all mexican workers. so you know trump is a liar on that one. a "washington post" trump, old post office, he couldn't find anything made in america there. he said the only thing that was made in america was mints. you look at his supply line of clothes and everything else. it's the whole thing is a sham. you know, i mean this guy is

going to be the leader of the free world and talk about bringing jobs back, and it is just not going to happen. you know, the guy is a liar. host: tom, do you have a question for the panel? caller: basically, if this guy is going to be the leader of the free world, and he's talking about bringing jobs back, you know, and imposing tariffs, he doesn't live by what he's saying. he's never lived by it. his whole career, the thing has been a lie, and now all of a sudden, he's worried about trade? host: that is tom in washington, d.c. mr. hufbauer, anything you want to add? mr. hufbauer: well he slammed , trump pretty good. giving trump his money's worth this morning. well, i guess i would elaborate a little bit on what you said and that is that trump himself is a multi-national corporation , and he has located many hotel

s or his brand has located many hotels around the world and does it for the same reason that many companies locate their facilities abroad. it is to get market access. it is to get market access. it is not to produce there and sell here, it is to spread the costs, and let us just go back to trump. trump spent a lot of money in creating this brand, you know, the image and also all the facilities and so forth. he spent that once, and now he can use it in tokyo, china, any place else. that story applies to all the companies that he's slamming, so yes, there is a certain, let's say lack of consistency in his , approach. mr. baker: trump is trying to maximize his prophets, and that is what you expect businesses to do. look, we're staying in america, you know, sometimes it is because they want to help american workers, sometimes it

is a marketing pitch. whichever. i assume corporations in general go wherever they can make the most profit. if that means produce nothing -- reducing a thing in china rather than the u.s., that is what trump did. host: chance to comment on donald trump's trade team, start, mr. baker. mr. baker: they are an unusual group and they depart from standard economics in the sense they have been talking about protectionist measures. navarro and charles -- they are in power, whether we like that or not, that is the story. what is their agenda? in particular i've heard trump go on, as well as peter navarro, about all of these complaints against china. my view, i look at that, ok, you can negotiate with china, the first thing to publicly threaten them with tariff, i don't know, i'm not a negotiator, i don't know. the one thing i will say is that i know you cannot go to china with a laundry list. their economy, by some measures, economy.than the u.s.

if you go there and say, look, we have a priority. for me, that is currency. whether that is true with him, no idea. ok, currency, you're not respecting microsoft's copyright on windows, you don't respect pfizer's patent on drugs, not giving access to the financial industry, you can get one of those things, may be. we might have to give something for it, too. you aren't going to get all of those. host: what is an example of something they want us to give? mr. baker: i'm not that sure. they have issues on market access for some things, so i couldn't tell you what would be their priorities, but again, i'm sure there are plenty of things. when we sit down, not we, we will not be there, the u.s. sits there. host: we could host the program from there. the viewers would like to join in. mr. hufbauer: it is an unusual group. we have the billionaire wilbur robert speculated to

, be u.s. trade representative. very experienced lawyer, very experienced. but his practice is entirely -- has entirely been on the trade remedy side, locking imports in the united states and who we have peter navarro, has written some pretty dramatic books with dramatic titles like "death by china," and so forth. so you get the flavor of the trade team. but what i would like to impress to you with a little bit with dean on this, trump also has a financial team, very wall street oriented and i don't think these people subscribe to the "death of china" or, let's go out and hit them hard, monday, tuesday , and wednesday. so who are those people?

mnuchin, hudlow, who may be in the council of economic advisors. i think they are going to put a brake and further i think trump has higher priorities in creating big trade war with china, namely obamacare, action reform, as he sees it, and infrastructure. so i don't think the trade team is going to jump out of the box on january 21st and terminate nafta and put a 45% tariff on china, i think they will be somewhat slower and more restrained. mr. baker: one of the ironies since trump won the election is that the dollar has gone up a lot in value. we see long-term interest rates rise, the expectation, no one, we are all reading in our ideas about what the market expects. the expectation is that trump will spend more money, will have his tax cuts something on , infrastructure, we don't know what exactly. that will lead to more inflationary environment, higher long-term interest rates that raised value of dollar substantially. that goes long way if you are concerned about the trade

deficit. host: diane in douglasville, georgia. diane, thanks for waiting, go ahead. caller: good morning, gentlemen. the most, i'm asking you this. i'm going to simplify what i'm saying so everyone can understand and you don't have to be asking questions. i would like to hear their view. anyway the first thing that i talk aboutbout that the trump administration policy and i am at a loss as to what it , is. i believe c-span should really get in there and say to us, and these men here would maybe give us a little more insight. i don't know what it is, what they are, right? the person who just spoke mr. , baker, please don't jump the gun, ok. we don't know what the economy will do in a month's time. we do not know if president barack obama is still president, he came in and he told -- now it is 20,000, give him -- he has

made the economy much, much better. they are talking about unemployment. i was promised that i would hear about how technology affects americans. americans have technology, people don't serve gas anymore, you serve yourself, you go to the stores, new york price check, we don't know how many employers are out of a job because of that. look at the garbage collector, i'm talking about the small man that we see everyday. and they do not have two anymore, they have automated, -- automation. they take up the garbage and it goes in there. host: diane, you bring up a lot. let the panel talk through some of what you brought up. i'll show you some things donald trump has talked about on trade proposals to perhaps that might address your first question. he suggested pulling out of the world trade organization. he's talked about leaving nafta

is mexico does not agree to renegotiate the back. -- the pac, talked about not signing the transpacific partnership agreement, imposing tariffs up to 45% on china, 35% on mexico, declaring china a currency manipulator if it doesn't change trade practices. -- mr.er, i will hofbauer, i will let you start. mr. hufbauer: i would like to agree with the caller that trump isn't entirely consistent and right now, he is communicating to the rest of us through these tweets, which are very short. there are issues on which he's already changed his position or modified his position both during the course of the campaign and since being elected. so, she is quite right that i think there is more uncertainty with respect to trump's presidency than there has been with other recent presidents. i think there is a lot of

uncertainty, so i'm in total agreement with that. i also want to pick up on the point made about technology and tie it in with trade. that is a very important point. you are entirely correct that technology is the main cause of loss of or change of jobs and loss of manufacturing jobs. we are tremendously innovative and productive nation, but that means that many people had a job which they learned and now the price check at cvs, or any other store has replaced that job with a scanner. and you can go to the whole list that you mentioned and i just , want to throw out one statistic, not to be too boring. when i was a kid, about a third of the work force was in manufacturing. that was back in the 1950's. today, it's under 10%, about 9%.

and most of that, by far, the great majority of that, is because of technology. we produce more manufactured goods, by far, but we do it with far fewer people and that same technology ripples to the service industries, which you mentioned. so thank you very much. host: mr. baker, i will let you respond as we show this chart showing manufacturing jobs in the u.s. from 1994 through 2016, 1994, the implementation of nafta. the blue line is manufacturing. you can see how they have dipped in 2010 to under 12 million jobs. the red line is retail. mr. baker: i wish you went back to 1970. i agree in some part with mr. hu fbauer. look at manufacturing employ frment 1970 to 1997, it was very little change, ups and downs.

during upturn, we have more, during the downturn, we have less. roughly 17.5 million as of 1997. that falls sharply over the next decade. that wasn't technology, that was the explosion of our trade deficit from 1% of the , economy, $180 billion in today's economy to 6%, close to $900 billion in today's economy. that cost a huge amount of manufacturing jobs. that was the disruption in ohio , in pennsylvania, across the rust belt, that was trade, that wasn't technology. that is a big part of the story. the other point i was going to make is that there is a lot of this confusion on technology. i don't see technology as bad. the point i would make, for technology to -- for all talk of robots and artificial intelligence, relatively weak productivity growth. that is what automation is, that slowed to a crawl over the last decade, 1% a year over the last decade, and that compares to 3% a year in what we refer to as golden age, from 1947 to 1993.

that was a period where we had very low unemployment, sometimes as low as 3% in the late 1960's. good which growth up and down the income ladder. technology doesn't have to be the enemy of workers. we should want it, but we want to make sure workers share in the gain. the policy of pursuit over the last few decades led most gains from technology from productivity growth to go to top end. trade is part of the story. host: under 20 minutes left in our program today. bill is in marietta, georgia. a democrat. go ahead, bill. caller: gentlemen, glad you had that format today. a lot of people call in talking about getting rid of the epa, energy department, education department. what effect will that have on trade? because a lot of companies have us billing their company and just wash it down there local sewers that the citizens have to pay for. thank you. host: mr. hufbauer, do you want to start? mr. hufbauer: you are right. a lot of people want to get rid

of these departments. in fact the designated secretary , of the energy department was famous, governor perry, for saying that was one of three departments he wanted to get rid of when running for president. mr. baker: he forgot that one. mr. hufbauer: he forgot that one. it was very much in his mind and now he will be secretary and epa , well you know, that is not one , of the favorite departments. education, one comment on education. mean the federal government is , not the big player in education system in this country . it is really the states and the localities. i know they want things to be done in

education. maybe trump will change the education system dramatically, but historically, it's a state and local matter. well, i think there is a lot of resistance, including in the republican party, including the republican party. think, you know, cutting back, reducing the scope of these departments, which you have mentioned, agencies and departments, and so it is not something trump can do, not one of his presidential powers, it requires congress. i just don't think it is going to happen. going to happen. host: one story on front page of washington times, dean baker, and then respond. epa is looked at in this story in the washington sets up role pa reversal in climate battle. talking regulatory agenda in courts, focusing on energy and we ronmental issues when take up those issues in this week, discussing policy matters the trump administration, today we're talking about trade. yesterday national security. tomorrow energy and environmental issues mrchlt baker. guest: glad have you it tomorrow, that is huge. will do deal with that here.

epa, second, not dealing with specifically.sue we hear talk about cost of regulation. most of them have some cost. otherwise, businesses would do it already. they have benefits and remember 1990, the clean air act limited partick lutes power plants could emit when they burned coal. did studies on the benefit, health effects and found ratio to cost of 100 to 1. trillions of dollars of benefit people y terms of fewer dying, fewer people getting, laces like west virginia, the idea that somehow it would be boom time. want eminded, we don't regulation. in west virginia, coal miners that weren't nes properly regulated and waste pilled in west virginia and people weren't able to use their water. regulations have a purpose. find one, two,an

three problems regulations are excessive. excessive defend regulations, but getting rid of blanche, jeopardizing lives. host: how big priority negotiating tpp, to bring up environmental standards in other country? is that getting lip service or was it part of this? that, we may differ on definitely in the lip service story n. nafta, it is always a side agreement. investor rights, special tribunal, their own good enough, we will try to do this and that, better than nothing. selling point to certain constituency trying to move trade deals. environmental groups haven't generally been buyers. uest: back to the transpacific partnership which trump rejected and not going to be ratified. good as a very environmental chapter, by far the best. is that it requires

countries respect the multi environmental agreements which they sign on to and then tpp would have enforcement echanism between countries to pull up the socks of countries n their exception to environmental agreements. it has further encouragement for countrys to sign on to the range of multi lateral environmental 20 or so , like around. we haven't had anything like that before. is very different than the side agreement in nafta, which i we've ith, dean, and written, was basically clinton's fw getting nafta through congress. lot, it t do a whole does commission studies, but this is a much stronger one. is possible if trump, nafta, hisenegotiates team discovers what is in the

know, bring y, you that chapter in to nafta. and i would say actually the labor, but i won't take up more time. left if ut 10 minutes you want to get your call in. republicans, 202-748-8001. democrats, 202-748-8000. independents, 202-748-8002. wait nothing newtown, pennsylvania, independent. ahead.o caller: good morning, thank you for taking my call. i have to comment on lack of of your callers this morning. the caller from washington, who the post ove past office that trump hotel in washington and saw nothing, but workers. guess what, the companies that bid on the hotel, they are the one, whoever won the bid are hiring mexican workers. why? because obama administration is not enforcing e-verify, that simple. trump's hotel, house tlt keeping

services, you think he hires each individual person? no. that is outsourced. idded like ara services and companies like that, bid on housekeeping jobs. they are not using e-verify. if i could comment, the department of energy and the epa, guess what. started the department of wasgy, the goal and mission to become energy independent, after how many decades, how is that working out? the reason it is not working out, everything the department epa ergy wants to do, the comes out with, that is why we eed to drain the swamp in washington and you people aren't getting it yet. concentrate on facts and don't go off on tangent like you do. thank you for taking my call. host: we don't know how that knew it was all mexican workers when he was driving by. hufbauer, if you want to

start on this response? guest: sure. in part.ith the caller e-verify, employers checking on employees, is the right way to immigration, not a wall, .ut on the employment side have not e note, we had net immigration from mexico, mexicans do come and go back, but not much net immigration in years.t five persons in illegal the united states is about 11 million and has been and mostly mexican mexican. independents, i was in the and r administration remember that episode quite well. caller is right, the energy

department has not brought energy independence, but guess what fracking is doing it and we are, net imports of oil are way down and it is conceivable that another five or ten years we will be energy independent. doesn't mean independent of world prices, but it does mean we may not have much in the way imports of oil. guest: i would like to agree on both points. with immigration, it is unfortunate, close to bipartisan agreement, the second president bush was in the white house, setting up path to you know, on, citizenship for people here ndocumented and wanted to stay here. only humane thing to do. also having the system e-verify employers would be responsible to make sure people were here going to they were hire them and be held accountable for not doing that, wasteside.y the i hope whether donald trump is

repared to go that direction, doesn't seem that way, that i think is the path. independence, i don't see that as a good argument. i remember richard nixon talking but that aside, the idea of being energy independent makes no more sense than producing or whatever. security we can't get the oppositead, in direction, we want to have oil in the ground fwe drill it out today. go, we don't want to import it from saudi arabia, let's 15, 20 somewhere 10, years ago, for oil. strategic reserve? guest: that will last a few months. if we're talking about long the worst thing we could do is drill it out. think we will 't be in that situation, but if that is our concern, we're fwing the wrong way. donna in chicago,

illinois, republican, go ahead. you r: good morning, how doing, everybody. everybody's comments are great. this is the situation, they're paying attention to what is going on on these jobs. too many mexicans in key positions stopping american white and lack and all other ethnic groups from getting hired. had to ride e who to the company and get a white resumeual to look at her to see she was qualified to do the job because they would not at the desk cause the hispanic human resource her that there was no jobs. host: donna, so i'm clear, illegal immigrants taking jobs? jobs in llegals taking key positions because people hiring them in and doing paper to give them the job. we need to wake up. not only that, they are stealing the american companies.

-- you go to ng ndiana and look at what that walmart was 10 years ago, it is not anymore. happened.ople what they were stealing so much out of the stores hiring their own of their own kind. host: all right. donna in chicago, illinois. immigration discussion we're having today. anything you want to pick up on? a st: yeah, there has been lot of research on impact of immigration on wages, most find effect, much find no effect. less educated workers, workers without a high school degree, there has been negative effect. i don't think that is the major of workers not getting jobs or seeing pay increases. normalize thet to process, e-verify, a good see immigration having disaster for the country. hufbauer, victoria, a

democrat. please bearntlemen, with me. i have a couple questions. donald trump wanted to put a 45% tariff on 25% on mexico. consumers, wouldn't prices fw up for us? also, wouldn't it be beneficial, you asked the gentleman, maybe calls ago, would you rather have jobs sent to mexico china?sed to mexico say, send them to because i think maybe if you sent them there, they have cheap maybe we wouldn't have so many immigrants crossing the border. thank you and i'll listen. host: mr. hufbauer. victoria. guest: thanks for that question. first of all, i don't think the tariffs, the really high tariffs

on mexico and china are good idea. they would cause prices in a lot people buy in walmart, other things in, you know, vegetables and so pretty sharply. i think once it happened, there around a big turn tlt in opinion. ut in addition to that, these countries are not going to sit by. hey have political leaders, have to respond because that is what the political system does. by they will respond retaliating and they will target retaliation in places where they think it hurts politically in the united states, which be some red y states and maybe some of the ground states.e we've done work on this at the peterson institute and the disruption is

eally substantial when you're talking tariffs at high levels 45%.5 and now, i believe in the free market. in companies competing with each other and kind of may best company or country win. but on your point of china mexico. it is true, that every mexican mexican imports in the united states have a 40% content. in other words, tremendous we send to mponents mexico, textile, electronic the united back to states that m back to the united stat states. with china.true probably the comparable figure 7%.china is about that might make one feel better. host: mr. baker. on tariffs, i t

want to make the point, if we et closer to balance trade, imports cost more sdchlt that mean people are hurt by that? some will. some won't. the analogy, we have protection people like people, those sitting around the table. you can't be a doctor in the play a tates unless you u.s. residency program. much as arn twice as doctors in other countries, $100 y, canada, cost billion in higher medical cost. suppose we snap our fingers and healthcare for g lower prices. tell doctors, good news, you are aying less for healthcare, which they could. they are net losers in the story. we could have a story with import prices, large segment of the work force, up facturing workers end better off. host: mary anne has been working. democrat. go ahead. talking aboutd in comparative advantage.

i may have missed part, i think americans part most don't understand, not the advantage piece of the in piece of the ts other countries, but the the ive opportunity within opportunity cost within a country, at least 40 years ago economics, and so this country never come to grips be sure thattem to the opportunity costs are some t here that we have mechanism for dealing with it to areas where trade is a huge benefit, so that those benefit is not a huge can also share and it is based not comprehending what comparative advantage, the role of comparative advantage and why here is an advantage to the world in international trade. host: mr. hufbauer, our last give you first 30 seconds.

what you earned is through today on comparative advantage, cost within a country, not cost countrys; you are there then you're third point agree with grip, i that 120%. country that says to guest: comparative advantage assumes full employment so people can go elsewhere. we are in a totally different world we're not talking about 100 million. we are off by orders of there is in host: plenty more to read about by these men on their websites.

>> c-span's washington journal live every day with news and policy issues. coming up wednesday, politico reporter willews discuss the records of the meant number trump has tapped to lead his departments, as well as the transitions. guests will discuss what will happen to obama era policies. then the economic policy studies will look ahead to energy and environmental policy during

the first 100 days of the trump administration and beyond. be sure to watch washington journal live at 7:00 eastern wednesday morning. next, president obama and minister sharon's of of a -- prime minister, shinzo abe. wednesday book tv and prime time features notable books of 2016 according to publishers weekly. at 8:00 p.m., racial cleansing in america. ed young, the microbes with us and a grander view of life. margo shibley on hidden figures, the american dream and the untold story of the black women mathematicians who helped to win

the space race. gary young, another day in the death of america. 2016, 8:00 p.m. eastern on c-span two. seven months after president obama made his historic visit to hear a shema, he was joined by abe atinister shinza pearl harbor. they laid wreaths at the memorial in arizona. >> thank you.

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